Can you help me analyze this commercial flip?

[Patrick Philip]

This is completely hypothetical. I'm just trying to get the routine down. This is a commercial building I saw while driving.

https://www.dropbox.com/s/6n0mwys94g55htu/0325181533.jpg?dl=0

Looks like it has 5 units, of which 4 are vacant. I know how to look up the owners and get their mailing address.

But I would need help knowing what price to offer, and what ARV I think I could sell it at. I suppose I would need to know what rents to expect if I can fill the vacancies. Perhaps I would need to know a little about the local commercial retail market, and why these spaces are vacant in the first place?

[Sam LLoyd]

It sounds like you are on the right track. I would say the biggest factor is the commercial vacancy rate. I've been wanting to get into commercial, but the holding costs during that innitial rent up have been the variable that has kept me away. So, figure out your expected vacancy rate, the projected rents, and the expenses to create a proforma for the property that allows you to arrive at a CAP rate. Be conservative... that will be the price you sell at. Then figure out how much profit you want, how much your holding costs are going to be until it cash-flows, what the cost of getting it rent ready will be, put a healthy margin in there, and that's the buy price. It's a lot of numbers to gather.